When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair value of $100,000.
What amount should have been reported for the land in a consolidated balance sheet, assuming the investment was obtained prior to the date the purchase method of accounting for new business combinations was discontinued?
A) $70,000.
B) $75,000.
C) $85,000.
D) $92,500.
E) $100,000.

Question

Quizplus · Accepted Answer

BV $70,000 + FV Controlling Differential ($30,000 × .75) = $92,500